The treatment of Personal Injury damages in divorce proceedings; the risks, and the measures that every practitioner should consider
Increasingly, I find myself asked by one member of an international couple to draft an agreement which I have to advise them will be difficult to uphold, especially across international borders.
The vast majority of my clients have international connections, whether by nationality, residence, or substantial assets outside England. While there is a substantial amount of international family law to help such couples, there are huge gaps. Many of the gaps involve significant issues which clients want advice on every day.
Although it probably seems surprising or illogical, there is no such thing as an international prenuptial agreement which will have guaranteed recognition across borders. Further, international agreements over child welfare issues which can have recognition do not exist either.
Generally speaking, there are two categories of matrimonial agreements, to do with property or maintenance, available to international couples – those arising from civil law systems, and those arising from common law (i.e. where Great Britain had its empire reach, including most of the jurisdictions in the United States). If a London lawyer drafts an agreement for a couple in London and they are posted to Hong Kong or Australia for work reasons for instance, then there is very high certainty that the agreement will be respected in that foreign jurisdiction. The English and foreign jurisdictions talk the same legal language.
However, it is a lot more difficult and complex if the couple are posted from London to Milan or Paris. This is because the civil law system operates in a fundamentally different way. For a start, the agreements reached there are matrimonial regimes and operate from the day the parties get married. They cover death, and insolvency as well as divorce (prenups only cover divorce).
So the French or Italian judge might apply some or all of the agreement with a degree of difficulty. If the couple signed an agreement in Milan or Paris where they lived and then came to London and later separate here, the position is even less certain. The English case law since 2010 is confused on the operation of foreign agreements. In many cases, the English judges have refused even to apply them. If you are the weaker spouse financially speaking, you may of course be very happy indeed about that as the English courts generally would provide more generously for you!
All of this stems from the fact that under English law, a judge does not have to enforce a matrimonial agreement. The judge can go outside it if he feels it was drawn up in an unfair way or, recent cases have said, simply because the agreement is “foreign”. Couples from abroad who are used to their matrimonial regimes, which are mandatory, find this frustrating. It is no coincidence that the vast majority of the cases reaching the higher courts on the question of prenuptial agreements over the last 20 years have involved couples where one, or usually both, are foreign.
Careful drafting can help minimise all these risks but, to me, that is not acceptable any longer and the law needs to be clarified. Ideally, there needs to be an international convention but this is a long way off at best.
With children, international agreements are equally difficult.
A very common dispute for our clients can arise where an international couple split up and one wishes to return to their home country with their child(ren) or to a new country of work. An American wife may want to leave her Spanish husband, or a French husband his US wife.
On separation, the main carer of the children may wish to travel half way across the world to a new place of residence. This relocation dispute involves a huge sense of disempowerment for the parent left behind because contact arrangements will be very limited compared with before. These cases often lead to litigation where the left behind parent tries to stop the move in the first place.
The chances of agreement in such cases are remote. Even when agreement is achieved there are problems.
The parent left behind will sometimes seek a mirror order to be lodged in the new place of residence of the carer of the children. This enables orders to be enforced more easily, for example for arrangements to see the children. But in reality, the parent who cares for the children will be able to modify the arrangements relatively easily if there are justifiable changes of circumstances.
There exists therefore scope to leave the parent left behind further disempowered.
The third type of agreement is for international couples and is related to the child relocation situation. We are seeing more requests for this type of arrangement.
Some international couples are fearful enough of a possible separation one day that they try and provide in advance for the day they might separate. They sign up to an agreement which says that they agree the unhindered move of one parent with the children to their designated country - usually the country that parent hails from.
Such agreements are useful statements of intention should the matter reach a dispute – but as we have to advise clients, they are not binding. What governs at the time of the separation is child welfare and the parent facing the departure of other family members can challenge such an agreement on welfare grounds.
So, like so many family agreements across borders, the agreement is difficult to enforce. It doesn’t mean that clients should not bother with agreements, far from it as they do often protect clients. But, clients should go in eyes open in this area, aware of the parts that are watertight, and reducing the risks for those parts that are not.
For further information on family law agreements and issues affecting international families, please contact a member of our family team for advice.
This article was first published in WealthBriefing in March 2016.
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